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UPDATE 7-EU approves Brexit delay until Jan. 31 as PM Johnson pursues election

William James and Kylie MacLellan

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* EU member states agree 3-month flexible extension

* Johnson accepts Brexit delay

* Parliament to vote Monday on Johnson's election demand

* Johnson tells EU: make clear no more delays (Adds Johnson's acceptance of delay)

LONDON, Oct 28 (Reuters) - The European Union on Monday agreed to a potential three-month Brexit delay that Prime Minister Boris Johnson had vowed never to request, as Johnson sought a snap election to secure a majority capable of passing his divorce deal.

Days before the United Kingdom is formally due to leave the EU on Oct. 31, Brexit hangs in the balance, with British politicians still arguing about how, when or even if the divorce should take place at all.

Johnson, who won the top job in July by vowing to deliver Brexit on Oct. 31, "do or die", was driven to request a postponement after he was defeated in parliament over the ratification of his divorce deal.

The 27 countries that will remain in the EU agreed on Monday to put off Brexit until the end of January, with an earlier departure possible should the faction-ridden UK parliament ratify the separation deal that Johnson agreed with the bloc.

If no EU country objects within 24 hours - by Tuesday afternoon - the delay will have been formally adopted.

In a letter to European Council President Donald Tusk, Johnson reluctantly accepted the delay, saying he had no choice under British law.

"This unwanted prolongation of the UK's membership of the EU is damaging to our democracy," he said.

"I would also urge EU member states to make clear that a further extension after 31st January is not possible. This is plenty of time to ratify our deal."

U.S. government bond yields rose on the news. The pound was trading flat at $1.2853.

With British politics still paralysed over Brexit, 3-1/2 years after a 52%-48% referendum vote in favour of leaving the EU, Johnson is demanding parliament approve an election on Dec. 12 in return for more time to adopt his deal.

But he needs the support of two-thirds, or 434, of the 650 lawmakers. A House of Commons vote was due around 1900 GMT. The main opposition Labour Party was set to abstain, seemingly putting that total out of reach.

THIRD DELAY

Britain's departure has already been delayed twice - from March 29 and April 12 - after Johnson's predecessor, Theresa May, failed three times to get her deal ratified by parliament.

The EU, forged from the ruins of World War Two as a way to prevent another ruinous conflict in Europe, is fatigued by Britain's protracted crisis but keen not to be held responsible for an economically tumultuous "no-deal" rupture.

French President Emmanuel Macron had been the main hurdle to an extension, arguing there had to be a good reason for a delay and that the British had to break their own political deadlock. But a source close to Macron said the prospect of an election in Britain had strengthened significantly.

The source said that the third Brexit delay would come with conditions including a refusal to renegotiate the divorce agreement and a green light for other EU countries to meet without Britain to discuss the bloc's future.

Even though Britain is set to leave, it will have a legal obligation to nominate a new commissioner for the EU executive.

The latest delay plan envisages that Britain could be out on Dec. 1 or Jan. 1 if parliament ratifies the deal in November or December, according to diplomats in Brussels.

But in London, there was no consensus on the election that Johnson says is needed to overcome the impasse.

Pressure on Labour was increased by two other parties, the Liberal Democrats and the Scottish National Party (SNP), which called for an election on Dec. 9 on condition that Johnson give up his attempt to push his deal through parliament.

Downing Street sources indicated that, if their attempt on Monday to force an election failed, the government could introduce a bill similar to the one proposed by the Liberal Democrats and SNP - which would require only a simple majority.

(Additional reporting by Elizabeth Piper, Kylie MacLellan and Andrew MacAskill; Writing by Guy Faulconbridge Editing by Mark Heinrich and Kevin Liffey)